Press Release

Ormat Technologies Reports Third Quarter 2020 Financial Results

Company Release - 11/3/2020


RENO, Nev., Nov. 03, 2020 (GLOBE NEWSWIRE) -- Ormat Technologies, Inc.1 (NYSE: ORA) today announced financial results for the third quarter ended September 30, 2020.


  Q3 2020 Q3 2019 CHANGE (%)
Revenues ($ millions)      
Electricity 123.7   124.0   (0.3 )
Product 29.6   43.0   (31.2 )
Energy Storage & Management Services 5.7   3.5   62.5  
Total Revenues 158.9   170.5   (6.8 )
Gross margin (%)      
Electricity 38.0 % 35.4 %  
Product 18.9 % 27.8 %  
Energy Storage & Management Services 25.6 % (9.3 )%  
Gross margin (%) 34.0 % 32.5 %  
Operating Income ($ millions) 51.7   38.7   33.5  
Net income attributable to the Company’s stockholders 15.7   15.6   0.5  
Diluted EPS ($) 0.31   0.30    
Adjusted EBITDA2 ($ millions) 107.1   85.5   25.3  

“Our third quarter results reflect the strength of our business model and our operating execution,” commented Doron Blachar, Chief Executive Officer. “Ormat delivered double-digit increases in year-over-year operating income and Adjusted EBITDA, and made progress with its efforts to grow its Electricity and Storage segments. Subsequent to the end of the quarter, we reached a favorable settlement and resolved the most significant tax assessment issued by the Kenya Revenue Authority (KRA). We are updating our full-year 2020 revenue guidance range and increasing our expected 2020 Adjusted EBITDA.”

“This quarter also delivered strong cashflow from operations and Adjusted EBITDA, driven mainly by a $20.1 million payment received from ENEE, our customer in Honduras, for prior years’ outstanding invoices, and improved collection from KPLC, our customer in Kenya. KPLC has made all scheduled payments for the third quarter and has started reducing overdue amount in October. In addition, we received $20.4 million business interruption insurance proceeds related to the 2018 volcanic eruption in Hawaii.”

“Furthermore, in the product segment, we signed a $12.2 million contract and we anticipate the signing of additional contract in late 2020 or early 2021, even though this segment of our business is most directly impacted by the COVID-19 pandemic,” continued Blachar. “We are encouraged by our storage segment results, which delivered its second consecutive quarter of positive EBITDA. The results were supported by the addition of the newly acquired Pomona storage facility as well as the volatility in merchant prices, which has driven increased revenues and profitability in our storage activity in the quarter."  


  • Net income attributable to the Company's stockholders was $15.7 million, or $0.31 per diluted share, compared to $15.6 million, or $0.30 per diluted share in Q3 2019;
  • Adjusted EBITDA3 increased 25.3% to $107.1 million, up from $85.5 million in Q3 2019;
  • Net income attributable to the Company’s stockholders benefited from an $8.1 million in insurance income related to our Puna power plant (representing Ormat’s 63.25% portion after tax), partially offset by non-cash charges of $1.4 million related to the Sarulla power plants. Additionally, a recent change in U.S. tax law resulted in a $3.7 million charge. In aggregate, these factors positively impacted our diluted EPS by 5.9 cents;
  • In Kenya, Ormat concluded a tax audit by the Kenya Revenue Authority (KRA) related to a $190 million tax assessment issued in December 2019 and reached a favorable settlement with the KRA. The total net estimated impact on Ormat’s results, all of which will be recorded in Q4 2020 is approximately $6 million, or $0.12 per diluted share, including all associated interest and penalties. The settlement covered tax years 2013 through 2019, and included deferral of tax benefits that were previously utilized by Ormat, resulting in a payment to the KRA of $28.2 million most of which the Company expects to recover through lower future tax payments;
  • At the Puna power plant, construction of the electrical substation and transmission lines is completed, and the power plant is currently connected to the transmission lines. On the field side, the Company connected one new production well to the power plant and is in the process of connecting a second production well. The Company expects to start generating power in the next few weeks with a gradual increase in generation to 29 MW by the end of the year, although the exact timing remains uncertain;
  • Ormat signed a new $12.2 million contract, which resulted in a Product segment backlog of $49.6 million as of November 3, 2020;
  • Electricity segment gross profit for the third quarter 2020 included $2.6 million of business interruption insurance income recorded under Puna’s cost of revenues. In the third quarter 2019, the Company recorded business interruption insurance income of $1.2 million under Puna’s cost of revenues;
  • In October 2020, Ormat announced the signing of two Resource Adequacy Agreements, each for 50% of its 5 MW / 20 MWh Tierra Buena battery energy storage project currently under development in Sutter County, northern California. The agreements were signed with two Community Choice Aggregators, Redwood Coast Energy Authority and Valley Clean Energy;
  • In September 2020, Ormat announced that Empresa Nacional de Energia Electrica, (ENEE), Ormat’s customer for our Platanares geothermal power plant in Honduras, has paid a $20.1 million overdue payment that was outstanding from prior years;
  • In July 2020, Ormat completed the acquisition of the 20MW/80MWh Pomona energy storage asset in California from Alta Gas for a total net consideration of $43.3 million. The facility is the Company’s first operational battery storage asset in operation in California, increasing its existing operating portfolio to 73MW/136MWh including its battery storage assets located in New Jersey, New England and Texas; and
  • In July 2020, Ormat issued approximately $290 million of senior unsecured bonds in an unregistered offering outside of the United States. The bonds bear interest at a fixed rate of 4.34% payable semi-annually on June 15 and December 15 through June 15, 2031. The Company used the proceeds to pay for the acquisition of the Pomona battery storage facility, repay existing indebtedness and to support its growth plans.


  • Total revenues of between $707 million and $717 million
    • Electricity segment revenues between $550 million and $555 million (including approximately $6 million of expected revenues related to the Puna power plant, assuming its reopening in the fourth quarter)
    • Product segment revenues of between $142 million and $147 million
    • Energy Storage and Management Services segment revenues of approximately $15 million
  • Adjusted EBITDA of between $417 million and $425 million
    • Adjusted EBITDA attributable to minority interest to be approximately $34 million.

The Company provides a reconciliation of Adjusted EBITDA, a Non-GAAP financial measure, for historical periods. However, the Company is unable to provide a reconciliation for its Adjusted EBITDA guidance range due to high variability and complexity with respect to estimating forward-looking amounts for impairments and disposition and acquisition of business interests, income tax expense, and other non-cash expenses and adjusting items that are excluded from the calculation of Adjusted EBITDA.


On November 3, 2020, the Company’s Board of Directors declared, approved, and authorized payment of a quarterly dividend of $0.11 per share pursuant to the Company’s dividend policy. The dividend will be paid on December 2, 2020 to stockholders of record as of the close of business on November 18, 2020.


Ormat will host a conference call to discuss its financial results and other matters discussed in this press release on Wednesday, November 4th, at 10 a.m. ET. The call will be available as a live, listen-only webcast at During the webcast, management will refer to slides that will be posted on the website. The slides and accompanying webcast can be accessed through the News & Events in the Investor Relations section of Ormat’s website.

An archive of the webcast will be available approximately 60 minutes after the conclusion of the live call.
Investors may access the call by dialing:

Participant dial in (toll free):   1-877-511-6790
Participant international dial-in:   1-412-902-4141
Conference replay    
US Toll Free:   1-877-344-7529
International Toll:   1-412-317-0088
Replay Access Code:   10149112


With over five decades of experience, Ormat Technologies, Inc. is a leading geothermal company and the only vertically integrated company engaged in geothermal and recovered energy generation (“REG”), with the objective of becoming a leading global provider of renewable energy. The Company owns, operates, designs, manufactures and sells geothermal and REG power plants primarily based on the Ormat Energy Converter – a power generation unit that converts low-, medium- and high-temperature heat into electricity. With 63 U.S. patents, Ormat’s power solutions have been refined and perfected under the most grueling environmental conditions. Ormat has 578 employees in the United States and 830 overseas. Ormat’s flexible, modular solutions for geothermal power and REG are ideal for vast range of resource characteristics. The Company has engineered, manufactured and constructed power plants, which it currently owns or has installed to utilities and developers worldwide, totaling over 3,000 MW of gross capacity. Ormat’s current 933 MW generating portfolio is spread globally in the U.S., Kenya, Guatemala, Indonesia, Honduras, and Guadeloupe. Ormat expanded its operations to provide energy storage and energy management solutions, by leveraging its core capabilities and global presence as well as through its Viridity Energy Solutions Inc. subsidiary.


Information provided in this press release may contain statements relating to current expectations, estimates, forecasts and projections about future events that are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally relate to Ormat's plans, objectives and expectations for future operations and are based upon its management's current estimates and projections of future results or trends. Actual future results may differ materially from those projected as a result of certain risks and uncertainties.

For a discussion of such risks and uncertainties, see "Risk Factors" as described in Ormat’s Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 2, 2020 and from time to time, in Ormat’s quarterly reports on Form 10-Q that are filed with the SEC.

These forward-looking statements are made only as of the date hereof, and we undertake no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

Condensed Consolidated Statement of Operations
For the Three and Nine Month Periods Ended September 30, 2020 and 2019
  Three Months Ended September 30, Nine-Months Ended September 30,
  2020 2019 2020 2019
  (Dollars in thousands, except per share data)
Electricity 123,660     123,978     395,201     395,965    
Product 29,625     43,037     120,737     147,195    
Energy storage and management services 5,662     3,484     10,022     10,442    
Total revenues 158,947     170,499     525,960     553,602    
Cost of revenues:        
Electricity 76,670     80,124     219,988     231,442    
Product 24,037     31,073     95,724     114,495    
Energy storage and management services 4,210     3,807     9,014     12,844    
Total cost of revenues 104,917     115,004     324,726     358,781    
Gross profit 54,030     55,495     201,234     194,821    
Operating expenses:        
Research and development expenses 1,490     1,062     4,281     2,772    
Selling and marketing expenses 4,076     3,783     13,724     10,924    
General and administrative expenses 14,539     11,931     43,154     41,801    
Business interruption insurance income (17,761 )       (20,743 )      
Operating income 51,686     38,719     160,818     139,324    
Other income (expense):        
Interest income 626     482     1,469     1,195    
Interest expense, net (21,756 )   (20,076 )   (58,814 )   (62,816 )  
Derivatives and foreign currency transaction gains (losses) 1,047     205     2,111     696    
Income attributable to sale of tax benefits 7,014     4,056     16,818     16,457    
Other non-operating income (expense), net 961     244     1,343     1,362    
Income from operations before income tax and equity in earnings (losses) of investees 39,578     23,630     123,745     96,218    
Income tax (provision) benefit (15,361 )   (9,626 )   (45,275 )   (20,136 )  
Equity in earnings (losses) of investees, net (1,119 )   1,085     (196 )   3,334    
Net income 23,098     15,089     78,274     79,416    
Net income attributable to noncontrolling interest (7,419 )   516     (13,516 )   (3,927 )  
Net income attributable to the Company's stockholders 15,679     15,605     64,758     75,489    
Earnings per share attributable to the Company's stockholders:        
Net income 0.31     0.31     1.27     1.49    
Net income 0.31     0.30     1.26     1.48    
Weighted average number of shares used in computation of earnings per share attributable to the Company's stockholders:        
Basic 51,072     50,933     51,051     50,816    
Diluted 51,282     51,334     51,386     51,124    


Condensed Consolidated Balance Sheet
For the Periods Ended September 30, 2020 and December 31, 2019
  September 30, 2020   December 31, 2019
Current assets:      
Cash and cash equivalents 197,309       71,173    
Restricted cash and cash equivalents 92,233       81,937    
Trade 157,497       154,525    
Other 23,349       22,048    
Inventories 34,384       34,949    
Costs and estimated earnings in excess of billings on uncompleted contracts 18,123       38,365    
Prepaid expenses and other 9,696       12,667    
Total current assets 532,591       415,664    
Investment in unconsolidated companies 91,277       81,140    
Deposits and other 39,293       38,284    
Deferred income taxes 108,145       129,510    
Property, plant and equipment, net 2,036,821       1,971,415    
Construction-in-process 463,073       376,555    
Operating leases right of use 16,762       17,405    
Finance leases right of use 12,399       14,161    
Intangible assets, net 197,002       186,220    
Goodwill 23,584       20,140    
Total assets 3,520,947       3,250,494    
Current liabilities:      
Accounts payable and accrued expenses 144,473       141,857    
Short term revolving credit lines with banks (full recourse)       40,550    
Commercial paper       50,000    
Billings in excess of costs and estimated earnings on uncompleted contracts 7,683       2,755    
Current portion of long-term debt:      
Senior secured notes 24,836       24,473    
Other loans 35,369       34,458    
Full recourse 17,768       76,572    
Operating lease liabilities 3,026       2,743    
Finance lease liabilities 3,148       3,068    
Total current liabilities 236,303       376,476    
Long-term debt, net of current portion:      
Limited and non-recourse:      
Senior secured notes 320,936       339,336    
Other loans 293,415       317,395    
Full recourse:          
Senior unsecured bonds 696,868       286,453    
Other loans 64,150       68,747    
Operating lease liabilities 13,407       14,008    
Finance lease liabilities 9,706       11,209    
Liability associated with sale of tax benefits 112,950       123,468    
Deferred income taxes 101,886       97,126    
Liability for unrecognized tax benefits 12,643       14,643    
Liabilities for severance pay 18,132       18,751    
Asset retirement obligation 52,193       50,183    
Other long-term liabilities 7,812       8,039    
Total liabilities 1,940,401       1,725,834    
Commitments and contingencies      
Redeemable noncontrolling interest 8,743       9,250    
The Company's stockholders' equity:      
Common stock 51       51    
Additional paid-in capital 920,210       913,150    
Retained earnings 534,984       487,873    
Accumulated other comprehensive income (loss) (15,503 )     (8,654 )  
Total stockholders' equity attributable to Company's stockholders 1,439,742       1,392,420    
Noncontrolling interest 132,061       122,990    
Total equity 1,571,803       1,515,410    
Total liabilities, redeemable noncontrolling interest and equity 3,520,947       3,250,494    

Reconciliation of EBITDA and Adjusted EBITDA
For the Three and Nine-Month Periods Ended September 30, 2020 and 2019

We calculate EBITDA as net income before interest, taxes, depreciation and amortization. We calculate Adjusted EBITDA as net income before interest, taxes, depreciation and amortization, adjusted for (i) termination fees, (ii) impairment of long-lived assets, (iii) write-off of unsuccessful exploration activities, (iv) any mark-to-market gains or losses from accounting for derivatives, (v) merger and acquisition transaction costs, (vi) stock-based compensation, (vii) gain or loss from extinguishment of liabilities, (viii) gain or loss on sale of subsidiary and property, plant and equipment and (ix) other unusual or non-recurring items. EBITDA and Adjusted EBITDA are not measurements of financial performance or liquidity under accounting principles generally accepted in the United States, or GAAP, and should not be considered as an alternative to cash flow from operating activities or as a measure of liquidity or an alternative to net earnings as indicators of our operating performance or any other measures of performance derived in accordance with U.S. GAAP. Our board of directors and senior management use EBITDA and Adjusted EBITDA to evaluate our financial performance. However, other companies in our industry may calculate EBITDA and Adjusted EBITDA differently than we do.

The following table reconciles net income to EBITDA and Adjusted EBITDA for the three and nine-month periods ended September 30, 2020 and 2019.

  Three Months Ended September 30, Nine Months Ended September 30,
  2020 2019 2020 2019
  (Dollars in thousands) (Dollars in thousands)
Net income 23,098     15,089     78,274     79,416    
Adjusted for:        
Interest expense, net (including amortization of deferred financing costs) 21,130     19,594     57,345     61,621    
Income tax provision (benefit) 15,361     9,626     45,275     20,136    
Adjustment to investment in an unconsolidated company: our proportionate share in interest expense, tax and depreciation and amortization in Sarulla 4,395     2,644     10,271     7,884    
Depreciation and amortization 39,628     36,365     111,728     106,982    
EBITDA 103,612     83,318     302,893     276,039    
Mark-to-market gains or losses from accounting for derivative 431     (330 )   (1,612 )   (1,909 )  
Stock-based compensation 2,807     2,228     7,060     7,231    
Merger and acquisition transaction costs 211     250     1,369     750    
Settlement expenses         1,277        
Adjusted EBITDA 107,061     85,466     310,987     282,111    

1 Ormat Technologies, Inc. is also referred to herein as the “Company”, “Ormat”, “we” or “us”
2 Reconciliation is set forth below in this release
3 Reconciliation is set forth below in this release

Ormat Technologies Contact:
Smadar Lavi
VP Corporate Finance and Head of Investor Relations
775-356-9029 (ext. 65726)
Investor Relations Agency Contact:
Rob Fink



Source: Ormat Technologies, Inc.